Working with Rivals: The Impact of Competitor Alliances on Financial Performance

Journal of Marketing Research, 44 (1), 73-83, 2007

12 Pages Posted: 5 May 2013

See all articles by Xueming Luo

Xueming Luo

Temple University

Aric Rindfleisch

University of Wisconsin-Madison

David K Tse

The University of Hong Kong - School of Business

Date Written: 2007

Abstract

To survive and prosper in today’s highly competitive environment, firms are increasingly engaging in cooperative alliances with their rivals. However, the impact of these competitor alliances on financial performance is largely unknown. This research examines this issue. Using both survey and archival data, the authors conduct two studies that reveal that the intensity of a firm’s alliances with its competitors has a curvilinear (inverted U-shaped) influence on return on equity. In addition, the authors find that a firm’s competitor orientation, as embodied in its strategies and objectives, can strengthen or weaken this curvilinear effect. Overall, these findings indicate that both competition and cooperation have dark sides that a firm must carefully manage when working with rivals.

JEL Classification: M21, M31, G00, G12, L86, M00, M30, M14

Suggested Citation

Luo, Xueming and Rindfleisch, Aric and Tse, David K, Working with Rivals: The Impact of Competitor Alliances on Financial Performance (2007). Journal of Marketing Research, 44 (1), 73-83, 2007. Available at SSRN: https://ssrn.com/abstract=2260505

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Aric Rindfleisch

University of Wisconsin-Madison ( email )

716 Langdon Street
Madison, WI 53706-1481
United States

HOME PAGE: http://research3.bus.wisc.edu/course/view.php?id=156

David K Tse

The University of Hong Kong - School of Business ( email )

Meng Wah Complex
Pokfulam Road
Hong Kong
China

Register to save articles to
your library

Register

Paper statistics

Downloads
48
Abstract Views
649
PlumX Metrics